Mon, Jun 04, 2018 - Page 16 News List

Smartphone market growth is dead: analysts

AFP, SAN FRANCISCO

After a decade of sizzling growth, the smartphone market has suddenly cooled.

Smartphone sales last year shrank slightly for the first time since the 2007 debut of the iPhone, surveys showed, while preliminary data this year pointed to further deceleration.

Several factors have hit the market, including a lack of new features that wow consumers, people holding on to their devices for longer and the saturation of key markets including China, analysts said.

“The market has peaked, that is the bottom line,” Technalysis Research analyst and consultant Bob O’Donnell said. “It is for sure not the death of the smartphone; it is the death of the growth of the smartphone market.”

The smartphone market began to hit saturation in 2016, much the way the tablet and PC markets did years earlier.

“It doesn’t mean it is not a strong market — it is a huge market — but it means vendors have to think differently,” O’Donnell said.

Smartphone sellers with slices of the market should no longer count on a fast-growing pie and instead rely on shrewd competitive moves to ramp up revenues, analysts said.

Samsung Electronics Co remains the market leader, surveys showed, but its lead over Apple Inc has slipped. China’s Huawei Technologies Co (華為) is holding the No. 3 spot and rival Chinese maker Xiaomi Corp (小米) has been growing rapidly, despite the lack of a US presence.

International Data Corp (IDC) said smartphone sales fell 0.1 percent to 1.472 billion devices last year, largely due to weak fourth-quarter shipments.

IDC expects another decline this year, before a rebound from new phones for 5G networks and India’s vibrant market, it said.

The “biggest driver” of the downturn last year was said by IDC and others to be the Chinese market.

The smartphone market in China would flatten out next year, while sales in India are expected to continue to boom on low-priced handsets, IDC said.

“China remains the focal point for many, given that it consumes roughly 30 percent of the world’s smartphones,” IDC analyst Ryan Reith said.

A catalyst for a smartphone rebound might be the arrival next year of devices tailored for ultrafast 5G networks, IDC said.

For now, the sector appears sluggish, as the handset market dropped three percent in the second quarter compared with a year earlier, a second straight quarterly decline, Counterpoint Research said.

“The waning smartphone demand is due to a slowdown in developed markets where replacement cycles are lengthening with overall smartphone features and design reaching its peak,” Counterpoint analyst Tarun Pathak said. “However, emerging markets still offer a sizeable opportunity.”

Handsets powered by Google-backed Android mobile are expected to continue to dominate the smartphone market, with a share of about 85 percent remaining relatively stable in the next five years.

“There is no question that Android is the OS [operating system] of choice for the mass market, and nothing leads us to believe this will change,” IDC said.

While smartphone shipments would ebb this year, the average selling price would rise more than 10 percent to US$345 and remain on an upward trend, IDC research manager Anthony Scarsella said.

“This year will continue to focus on the ultrahigh-end segment of the market as we expect a surge of premium flagship devices to launch in developed markets,” Scarsella said.

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